CPUC threatens to shut down 'rideshare' companies like Uber and Lyft operating at Bay Area airports

Bay City News Service

Posted:
06/13/2014 07:08:12 AM PDT

Updated:
06/13/2014 07:10:58 AM PDT

SAN FRANCISCO - State regulators are warning "ridesharing" companies such as Uber and Lyft that they could be shut down if drivers continue to operate at airports without permission.

In a letter dated Tuesday, California Public Utilities Commission President Michael Peevey warned that the ridesharing companies' permits are in jeopardy over the violations, which have occurred at SFO and other major airports in California including Oakland, San Jose, Los Angeles and San Diego.

The CPUC imposed regulations on the companies, termed Transportation Network Companies, last September including stricter insurance rules and a requirement that they obtain permission before operating at airports.

But despite the fact that none of the companies have obtained permits yet to operate at airports, police have contacted more than 300 drivers at San Francisco International Airport alone in the past month. The majority have been UberX drivers, and 70 percent did not have the proper "trade dress" indicating that they were working for a TNC, Peevey said.

Drivers caught operating illegally at SFO have included two drivers without proper driver's licenses, eight without insurance, five with no registration, two unlicensed drivers, and 20 vehicles operated by someone other than the registered owner, SFO spokesman Doug Yakel said.

"This is really what prompted us to reach out to the CPUC," Yakel said.

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Yakel said that the airport first started enforcement of the rules after coming up with a permit process on April 7. A week later, airport officials began contacting TNC drivers illegally operating at SFO and have encountered 365 since then.

Drivers contacted at the airport have only received a verbal admonishment so far and most drivers have only been contacted once, and some twice. No driver has been contacted a third time yet, but officers will issue a misdemeanor citation in that circumstance.

Peevey said many of the drivers when questioned said that they did not know what they were doing was illegal or that there were restrictions about TNC drivers operating at airports.

"California is the first state that created rules for this industry to promote consumer choice, we will not, however, accept consumer choice at the expense of customer safety," Peevey wrote.

Also on Tuesday, the CPUC issued proposed new regulations for drivers' insurance, requiring the company to carry $1 million in liability coverage at all times when a driver has the company's app activated, regardless of whether there is a passenger waiting or in the car.

The CPUC will take up the proposed change at its July meeting.

Until March, Uber had a $1 million insurance policy in place after a driver had accepted a ride through the Uber app and while a passenger was in the car, but no coverage during other circumstances.

The policy was questioned when an Uber driver killed 6-year-old Sofia Liu while she was walking with her family in San Francisco last New Year's Eve. The company argued that the driver, 57-year-old Syed Muzzafar, was not working for Uber at the time of the crash, despite the fact that he had the app activated.

In response, Uber instituted a $100,000 policy for drivers who had the app activated but had not yet accepted a ride, similar to the CPUC's proposed rule change but falling far short of the $1 million that would be required by the CPUC.

That $100,000 policy includes $50,000 for medical liability coverage, but attorney Christopher Dolan, who represents Sofia's family in a lawsuit against the company, has argued this is insufficient.

Dolan said that Sofia's mother was also injured in the crash and racked up $500,000 in medical bills.

Uber is continuing to contest the family's lawsuit in court, and despite its policy change, the company has continued to argue that it is not responsible for damages because at the time of the crash the driver was not carrying a passenger or on his way to pick up a passenger.

Representatives from Uber and Lyft did not return requests for comment today.